As More People Return to Working in an Office, Will Car Insurance Rates Increase?
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With more people getting vaccinated and COVID-19 restrictions being lifted, there are more drivers on the road. Reckless driving has also increased in 2020 and may contribute to higher car insurance rates this year.
In fact, reports show that even with less traffic last year, there were more incidents of distracted driving than before the pandemic started—a trend that may carry over into the summer and fall.
Car insurance and the pandemic
While one in four drivers believe roads are safer today than before the pandemic started, according to Investopedia, that may not be the case. A 2021 Travelers Risk Index on distracted driving showed that many dangerous driving habits increased during the pandemic. This includes:
- Texting or emailing (7% increase)
- Checking social media (7% increase)
- Taking videos and pictures (9% increase)
- Shopping online (9% increase)
Although distracted driving increased last year, car insurance rates decreased on average. According to the Wall Street Journal, 2020 marked the first national decline in car insurance rates since 2013.
Car insurance rates decreased by nearly 4% on average nationally in 2020 because miles driven dropped 51% during the course of the pandemic.
In addition, many insurance companies offered premium refunds between 15% to 20% a month in the spring of 2020. Some companies also suspended cancellations for non-payment for a period of time and allowed payment arrangements for past due balances. There were even special programs for low-mileage drivers and temporary price reductions put in place.
Increased rate of crashes leads to higher car insurance costs
Research and advisory firm Assured Research believes that car crashes could rise to pre-pandemic levels or higher as more people commute over the summer—especially after Labor day. When the risk of accidents is higher, it means insurance companies might have to pay out more in claims. These costs are passed along to drivers through higher car insurance premiums.
The research firm pointed out that more people who have been working from home will be returning to the office. The rise in traffic volume combined with bad driving habits developed during the pandemic can lead to an even higher risk of car crashes.
Assured Research also found that speeding and fatalities rose during the pandemic, according to a study by Cambridge Mobile Telematics. Many states are working to reduce distracted driving and other dangerous driving behaviors.
Save on car insurance with Jerry
Time will tell if these factors lead to increased car insurance rates in the summer and fall. State Farm has recently increased its rates for customers in Louisiana. But if you’re worried about overpaying for car insurance, Jerry can help.
Jerry’s free app compares quotes from up to 45 different insurance companies in under a minute. As a licensed broker, Jerry takes care of your insurance needs from start to finish. The app also monitors your car insurance rate every six months on an ongoing basis, so you’re always getting the most affordable price.